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Case Study on Trent Limited: Financials, Business Model, Marketing Strategies, and SWOT Analysis
The retail industry is a dynamic and ever-evolving sector, constantly trying to enhance consumer experiences through innovation. In India, Trent Ltd., a Tata Group subsidiary, has emerged as a retail powerhouse over the years. Founded in 1998, Trent operates leading brands like Westside, Zudio, and Star, offering fashion and essentials at competitive prices. With a focus on quality, affordability, and customer satisfaction, Trent Ltd continues to redefine the Indian shopping experience.

In this blog, we will focus on Trent Limited to better understand the business model and perform a SWOT analysis of the company.

Trent Limited Overview

Trent Limited is an arm of Tata Group and focuses on the fashion retail industry. Trent is one of the most renowned companies in India’s retail industry due to its pervasiveness and quality.

On 5th December 1952, the company was established as Lakme Limited (Lakme). The company was initially involved only in cosmetics, toiletry, and fragrance products. However, it was later decided that Lakme should diversify its business segment and enter the apparel retail field.

It was determined that Lakme would create a strong presence in the apparel field by opening a chain of sector-focused stores nationwide. In March 1998, Lakme purchased Littlewoods International (India) Private Limited from Littlewoods International Limited; LIPL was in readymade garments retail and related merchandise. Concurrently, Lakme Exports Limited, an arm of Lakme, was amalgamated with Lakme and renamed Trent Limited in 1998.

Now, we will be heading forward to the company overview.

Company Type Public
Industry Type Retail, Apparel
Founded on 1998
Headquarters Mumbai, Maharashtra, India
Parent Tata Sons
Subsidiaries Westside, Zudio, Landmark Bookstores, Zara (India), etc.

Trent Limited Business Model

Trent manages and operates a list of apparel subsidiaries. The list is provided below:

1. Westside

This retail company serves branded fashion apparel, footwear, home decor items, and accessories for all sections of society, namely men, women, and children. It has over 22 labels and exists in 200 retail stores measuring 8,000-34,000 sq. ft. in 82 major cities.

2. Utsa

This company provides products in the field of Indian lifestyle while offering ethnic apparel, beauty products, and accessories. It is currently present in approximately 7 stores across 5 cities.

3. Zudio

This apparel company caters to men, women, and kids while providing pocket-friendly clothes, footwear, perfumes, and much more. Zudio has successfully established more than 290 stores across the country.

4. Star

This store is incorporated under the TATA group and serves an assortment of products, including staples, beverages, health, and beauty products, with offerings in 10 hypermarkets and 26 supermarkets across the country.

5. Landmark

This store offers toys, books, stationery items, and sports merchandise from more than 16 stores nationwide.

Other subsidiaries and associates:
- ZARA
- Fiora Business Support Services Limited (FBSSL)
- Booker India Limited
- Trent Hypermarket Pvt Ltd
Trent Limited Key Metrics

Let’s see the key market data for Trent:

Market Cap ₹ 1,70,629 Cr.
Current Price ₹ 4,800
52 Week High / Low ₹ 8,346 / 3,801
P/E 115
Book Value ₹ 132
Dividend Yield 0.06 %
ROCE 23.80 %
ROE 27.20 %
Face Value ₹ 1.00
(As on 10th March 2025)

Read Also: TCS Case Study: Business Model, Financial Statement, SWOT Analysis

Trent Limited Financial Highlights

Income Statement

Particulars FY2024 FY2023 FY2022
Revenue 12,375 8,242 4,498
Total Income 12,664 8,502 4,673
Total Expenditure 10,548 7,665 4,262
Net Profit 1,353 310 29
(The figures mentioned above are in INR crores unless mentioned otherwise)

Balance Sheet

Particulars FY2024 FY2023 FY2022
Non-Current Assets 4,052 5,704 5,943
Current Assets 3,110 2,378 1,783
Total Shareholder Funds 4,068 2,595 2,364
Non-Current Liabilities 1,518 4,325 4,663
Current Liabilities 1,541 1,094 653
(The figures mentioned above are in INR crores unless mentioned otherwise)

Cash Flow Statement

Particulars FY2024 FY2023 FY2022
Cash Flow From Operations (CFO) 1,348 594 58
Cash Flow From Investing (CFI) -508 -102 56
Cash Flow From Financing (CFF) -629 -491 -107
(The figures mentioned above are in INR crores unless mentioned otherwise)

Key Performance Indicators (KPI)

Particulars FY2024 FY2023 FY2022
Operating Margin (%) 12.44 10.20 9.74
Net Profit Margin (%) 10.94 3.76 0.65
ROCE (%) 27.40 12.03 6.19
Current Ratio 2.02 2.17 2.73
Debt to Equity Ratio 0.12 0.19 0.21

Trent Limited Marketing Strategy

The company’s business model completely depends on its consumers because of the B2C nature of business. This nature allows the movement of goods through their offline channels and online stores. The company does not employ any intermediary for distribution purposes. This is made possible due to Trent’s complete dominance in logistics. Now, let’s have a look at the marketing strategies of Trent Ltd that directly led to their success:

Segmentation

This company has two segments i.e. contemporary and modern. These segments map the whole audience segment and retain the customers while providing the utmost quality and customer service.

Targeting

Trent has successfully placed brands for all sections of society (tier 1, 2, and 3). Each separate brand targets one of the three tiers. While Zara targets tier 1 customers, Westside captures tier 2 customers, and Zudio focuses on tier 3. By differentiating brands into each tier, they can serve all sections of society while maintaining their brand image.

Positioning

By focusing the brands’ efforts to further differentiate into genders, they are able to capture an even deeper market share. Each brand presents a unique value proposition that the other brands under the umbrella do not. This allows the consumers to choose one brand as their favourite and provide unrivalled loyalty in the long run.

Trent Limited SWOT Analysis

Strengths
- Trent Ltd. provides a large number of product mixes to their customers.
- Due to Trent’s differentiation and high market share, any new player would face immense barriers to entry.
- Over time, Trent has ventured into various businesses outside the services sector. This has enabled the company to develop a diversified revenue stream beyond the Services and Retail (Apparel) segments. Thus further diversifying the business.
Weaknesses
- The industry faces issues during economic downturns due to the seasonality of business. This became evident during the Covid 19 pandemic, as the topline figures took massive hits.
- The Cash flow position of the business is not pleasant, which is visible by its turbulent cash flow graph shown earlier.
- The balance sheet indicates an immense increase in borrowings. This could prove fatal in the long run if the management does not tackle this in the upcoming years.
- The business operates in a field of low margins and high capital expenditure. This may affect their already distressed financial position.
Opportunities
- The industry is very dynamic and evolves very quickly. This is evident from the recent uptrend in e-commerce websites entering the apparel industry. Trent could focus their efforts on this domain to maintain market share.
- Financially, the company must focus on decreasing its borrowings while increasing its branches. This will facilitate capturing more outstanding market share.
Threats
- Trent faces stiff challenges from international and local competitors. Most of this competition exists due to Trent’s low presence in online domains.
- E-commerce websites such as Myntra, Ajio, and Meesho have increased consumer activity because of the ease of ordering clothes from home. These organizations can cannibalise the market share of Trent in the long run.
Read Also: Zara Case Study: Business Model and Pricing Strategies

Future Outlook

Trent Ltd’s future looks promising as it continues to expand its operations in India’s booming retail sector. With a focus on affordable fashion (Zudio), premium lifestyle (Westside), and grocery retail (Star), the company is set to capitalize on opportunities in various sectors. As India’s consumption increases, Trent’s agile business model and strong brand portfolio position it for sustained growth and dominance in the retail landscape.

Conclusion

Trent Limited, a subsidiary of Tata Sons, has established a strong presence in India’s retail industry through brands like Westside, Zara, and Zudio. The company’s business model focuses on direct-to-customer channels, while its marketing strategy targets youth and families in tier 1, tier 2, and tier 3 cities. Despite facing strong headwinds, Trent Limited continues to evolve and expand in the digital sector.

Frequently Asked Questions (FAQs)
1. Does Tata own Trent?
  Yes, it is incorporated under Tata Group.
2. What is the full form of Trent?
  Trent Limited (a portmanteau of Tata Retail Enterprise).
3. What was the old name of Trent Ltd?
  rent Limited was initially incorporated as Lakme Limited (“Lakme”) on December 5, 1952.
4. What are the products of Trent Ltd?
  Trent caters to an audience of all groups via its vast products, such as Women’s wear, Footwear, Men’s wear, lingerie, cosmetics, perfumes, accessories, and home furniture.
5. What is the latest brand of Trent?
  Trent recently launched an occasion wear brand called ‘Samoh’.

Particulars	FY2024	FY2023	FY2022
Revenue	12,375	8,242	4,498
Total Income	12,664	8,502	4,673
Total Expenditure	10,548	7,665	4,262
Net Profit	1,353	310	29

Particulars	FY2024	FY2023	FY2022
Non-Current Assets	4,052	5,704	5,943
Current Assets	3,110	2,378	1,783
Total Shareholder Funds	4,068	2,595	2,364
Non-Current Liabilities	1,518	4,325	4,663
Current Liabilities	1,541	1,094	653

Particulars	FY2024	FY2023	FY2022
Cash Flow From Operations (CFO)	1,348	594	58
Cash Flow From Investing (CFI)	-508	-102	56
Cash Flow From Financing (CFF)	-629	-491	-107

Particulars	FY2024	FY2023	FY2022
Operating Margin (%)	12.44	10.20	9.74
Net Profit Margin (%)	10.94	3.76	0.65
ROCE (%)	27.40	12.03	6.19
Current Ratio	2.02	2.17	2.73
Debt to Equity Ratio	0.12	0.19	0.21

March 11, 2024

Non-Convertible Debenture (NCD) vs Fixed Deposit (FD): Meaning, Features, and Differences Explained

Are you unable to choose between putting your money into Non-Convertible Debentures (NCDs) and Fixed Deposits (FDs)? You’re not alone! Both options are popular among investors looking for safety and consistent returns, but they both come with their own sets of pros and cons. In today’s blog, we’re comparing NCDs with FDs.

Fixed Deposits – An Overview

It’s a well-known conventional investing choice for risk-averse investors. Fixed deposits are financial instruments offered to the general public by banks and non-banking financial organizations (NBFCs) that allow them to deposit money for a predetermined amount of time and receive a guaranteed fixed return. Both cumulative and non-cumulative options are available with the fixed deposit, giving investors the choice of receiving interest payments periodically or all at once when the fixed deposit matures.

Features of Fixed Deposits

1. The length of a fixed deposit may usually be chosen with flexibility; it can be anywhere from seven days to ten years.

2. Many banks provide an automatic renewal option that lets investors reinvest their money without having to go through any extra steps.

3. Fixed deposits often provide flexibility in the amount invested, with most banks allowing a minimum investment of INR 5000.

4. Fixed deposits are extremely low-risk investing options since they provide a guaranteed return.

5. Senior citizens benefit further from fixed deposit investments by earning interest rates higher than standard rates.

Non-Convertible Debentures (NCDs) – An Overview

Debt instruments, known as NCDs, are issued by corporate entities to raise long-term capital from the general public. Investing in debentures entails lending money to corporate entities in exchange for a fixed interest rate for a predetermined length of time. The principal amount of the loan is repaid by the company on the maturity date.

Two forms of debentures exist: convertible debentures, which can be converted into equity shares of the company after a specific length of time, and non-convertible debentures, which cannot be converted into equity shares. NCDs are issued in the primary market initially, but they can also be traded in the secondary market, offering investors greater liquidity.

Features of NCDs

1. NCDs have a fixed interest rate that is set at the time of issue by the issuing firm.

2. An investor will get consistent, recurring income from NCDs.

3. NCDs are issued for a particular period, after which the principal amount is repaid.

4. Purchasing NCDs entitles you to become a creditor of the business, allowing you to make claims against its assets in the event of its insolvency.

5. Due to the high risk associated with investment in corporate houses, these NCDs are rated by the credit rating agencies based on the creditworthiness of the issuing company.

Difference between NCD and Fixed Deposit

We’ll now explain the distinction between a fixed deposit and an NCD.

Interest Rate – Fixed deposit interest rates typically range from 4 to 7% annually, whereas NCD interest rates often range from 8 to 10%.

Issuer – Corporations issue NCDs to generate capital, whereas banks or other financial organizations issue fixed deposits.

Risk – NCDs possess higher risk as private business houses issue them. As some business houses have low credibility, investing in their NCDs can put your money at higher risk. On the other hand, FDs are issued by banks and other financial institutions that the Reserve Bank of India regulates.

Liquidity – Investment in NCDs offers higher liquidity than Fixed Deposits as they can be traded in the secondary market. Still, no such benefit is available in fixed deposits, although a premature withdrawal option comes with a penalty.

Taxation – NCDs held by an investor in demat are exempted from tax deducted at source while keeping the NCD in physical form attracts TDS if the annual payout is more than 5000 INR. Interest earned from a fixed deposit is fully taxable as per your tax slab if it is above 40000 INR (50000 INR in case of a senior citizen) in a financial year.

Credit Rating – The rating of NCDs by credit rating agencies is mandatory, while the fixed deposits issued by the banks are not required to get rated by any agency; however, corporate fixed deposits issued by non-banking financial companies are required to get the rating from any credit rating agency.

Interest Rate Risk – As NCDs are tradable in the secondary market, their price may vary based on interest rates prevailing in the economy, while fixed deposits don’t have any such kind of risk.

Safety – Assets of the company generally back the issuance of NCDs while the fixed deposit issued by the bank is insured against the bank’s insolvency up to 5 lakh INR.

Conclusion

Investment in fixed deposit is suitable for the investor with lower risk-taking ability and is happy with a lesser return on their investment. At the same time, NCDs can be opted for by investors looking to earn some extra return and can take additional risk for that. Overall, the above comparison shows the features of both fixed deposits and NCDs.

On a short note, investors must consider their risk profile, investment goal & objective before deciding between fixed deposits and NCDs.

Frequently Asked Questions (FAQs)

Can I withdraw my investment from a fixed deposit before maturity?
Yes, you can withdraw your investment before maturity, but you need to pay some penalty to the issuing authority.
Can I sell NCDs in the secondary market?
Yes, after NCDs are issued in the primary market, they are listed in the secondary market like any other securities.
What is the shortest and longest duration for which an NCD can be issued?
NCDs cannot be issued for less than 90 days and more than 20 years.
What is the minimum and maximum duration for which a fixed deposit can be issued?
The fixed deposit can be issued for a period ranging from 7 days to 10 years.
Is investment in NCD better than investment in fixed deposits?
NCDs generally carry higher risk as compared to bank fixed deposits but offer higher returns; hence, it is suitable for only those investors who can take risks for higher returns.

March 11, 2024

A Comparative Study on NSE v/s BSE: Differences, Similarities, and Popularity

Are you a beginner who wants to know about India’s two leading exchanges? This blog will briefly explain the workings of NSE and BSE.

The National Stock Exchange (NSE) was founded in 1992 and is the nation’s biggest stock exchange. On the other hand, the Bombay Stock Exchange (BSE) was founded in 1875 and is India’s oldest exchange.

Let’s distinguish between the NSE and BSE’s workings to help you understand their mechanisms.

NSE and BSE

Most of the trading in the Indian Stock Exchange takes place on these two stock exchanges:

National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)

These follow the same trading mechanisms, trading procedures, and settlement processes. As of December 31, 2023, the NSE listed 2,302 companies, and the BSE listed 5,309 companies till Jan. 30, 2024. The NSE is large in volume, whereas the BSE is the larger stock exchange regarding the number of companies listed.

Both of these stock exchanges make it easy for people to buy and sell stocks and also help in the efficiency of the stock market.

What is NSE?

The National Stock Exchange is the largest stock exchange in India based on market capitalization and is headquartered in Mumbai, Maharashtra. It was established in 1992 and brought with it the electronic mode of trading. The National Stock Exchange uses the Nifty 50 as its primary index, which comprises the top 50 stocks of the exchange across different sectors.

It acts as a platform for buying and selling different financial instruments, which include equities, currencies, derivatives, and debt securities. In addition to the Nifty 50, other key indices of NSE include Nifty Next50, Nifty500, Nifty Midcap150, Nifty Smallcap250, and Nifty MidSmallcap 400.

What is BSE?

Established in 1875 and headquartered in Dalal Street in Mumbai, Maharashtra, the Bombay Stock Exchange is the oldest stock exchange in India and was formerly known as “The Native Share & Stock Brokers Association”. In 1986, Sensex was introduced as the first equity index and still comprises the top 30 stocks of BSE.

The Bombay Stock Exchange also has numerous indices such as BSE 100, BSE 200, BSE 500, BSE MIDCAP, BSE SMLCAP, BSE PSU, BSE Auto, BSE Pharma, BSE FMCG, and BSE Metal.

Similarities between NSE and BSE

Before moving forward to comparing both stock exchanges in NSE and BSE. Let’s have a look at the similarities first. The similarities are stated below:

Both of these stock exchanges are popular among the investors.
NSE and BSE both allow stock trading.
Apart from equities, you can trade in bonds, mutual funds, ETFs, commodities, derivatives, futures, options, and currencies on these stock exchanges.
Both stock exchange bodies are registered under SEBI (Securities and Exchange Board of India).
Both of these stock exchanges are headquartered in Mumbai.
Both of these stock exchanges have electronic trading facilities.
Both exchanges list all mainboard IPOs but SME IPOs have an option to choose the exchange they want to get listed on.

NSE v/s BSE

This section will discuss the differences between these two stock exchanges. Let’s have a look into it:

Basis	NSE	BSE
Acronym	National Stock Exchange	Bombay Stock Exchange
Established in	1992	1875
Primary index	Nifty 50	S&P BSE SENSEX
Companies in the Primary index	50	30
Companies listed on the exchange	2,302	5,309
Global Ranking (By Market Cap)	6	10
Trading Volume	Higher than BSE	Lower than NSE
Products traded	Equity stocks, Equity derivatives, Currency derivatives, Commodity derivatives, Mutual funds, Exchange-Traded Funds, and many more.	Equity stock, currency derivatives, corporate bonds, Mutual funds, and many more.
Market Capitalisation	Approx. Rs. 334.7 lakh cr.	Approx. Rs. 333 lakh cr.
Liquidity	Due to higher volume, NSE provides higher liquidity	Due to lower volume, BSE provides lower liquidity

Popularity Among Investors

Over time, NSE overtook BSE to become the nation’s leading stock exchange for some of these reasons. The reasons are stated below:

Technology: NSE is run on a more advanced and reliable technology infrastructure, allowing faster and more effective trading than BSE.

Products: NSE offered a comprehensive variety of financial products, including derivatives (initially unavailable on BSE), which attracted more investors and traders.

Liquidity: NSE was known for its higher liquidity levels, which meant quicker and easier trading.

Efficiency: NSE introduced numerous measures to increase efficiency, stabilising the market during volatile times.

Which platform to choose?

Both NSE and BSE provide trading opportunities in different types of securities. However, NSE boasts of a larger trading volume making it more straightforward for the price discovery mechanism to work efficiently. Some of the stocks are only registered under BSE; if you want to invest in such stocks, you might have to trade on BSE.

Conclusion

In this blog, we saw the comparison between the NSE and BSE to choose which platform is more suitable for investors in the stock exchange. We also saw similarities among NSE and BSE.

Both stock exchanges are secure and provide efficient online services; hence, both are excellent choices, but NSE becomes the natural choice for investors seeking higher liquidity.

Frequently Asked Questions (FAQs)

Which is better: NSE and BSE?

Ans. While BSE boasts a larger selection of stocks, NSE provides greater volume and liquidity.

Can I buy on the BSE and sell on the NSE?

Ans. Yes, Shares can be bought on one exchange and sold on another, but only on the next day, i.e., on T+1.

Which exchange has better liquidity?

Ans. The National Stock Exchange (NSE) provides higher liquidity than the BSE due to its higher trading volume.

Who regulates BSE and NSE?

Ans. SEBI (Securities and Exchange Board of India) regulates both BSE and NSE.

What is the full form of Sensex and Nifty?

Ans. Stock Exchange Sensitive Index is the full form of Sensex and National Stock Exchange Fifty is the full form of Nifty.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.

March 11, 2024

Bajaj Finance Case Study: Business Model, Financials, Competitors, and KPIs

Have you ever heard about an Indian financial services company named Bajaj Finance?

This company is a part of the financial conglomerate Bajaj Finserv Group, which includes an insurance arm (Bajaj Allianz) and an advisory firm (Bajaj Wealth Management). This blog will discuss Bajaj Finance’s target audience, business model, services, and other offerings. Let’s take a look at the company’s profile.

Overview of Bajaj Finance

Bajaj Finance Ltd., or Bajaj Finance, is a subsidiary company of Bajaj Finserv Ltd. It is a deposit-taking NBFC, which stands for Non-Banking Financial Company (registered under the Reserve Bank of India) and is also classified as the NBFC-Investment and Credit Company (NBFC-ICC). The company specializes in lending and accepting deposits. It offers diversified loan facilities across retail, SME, and commercial customers with an established presence in rural and urban India.

Let’s have a look at the company profile overview:

Company Type	Public
Founder	Rahul Bajaj
Founded on	May 2007
Headquarter	Pune, Maharashtra, India
Industry	Financial services

After having a brief knowledge of the company, we will move on to some important statistical data related to Bajaj Finance. Here are the company’s essential statistical data represented below:

Market Cap	₹ 4,11,263 Cr.
Current Price	₹ 6,654
Stock P/E	29.8
Book Value	₹ 969
High / Low	₹ 8,192 / 5,486
Dividend Yield	0.45 %
ROCE	11.8 %
Net Profit	₹ 10,289.74 Cr.
ROE	23.5 %
Promoter Holding	54.78 %
Face Value	₹ 2.00

Financial Highlights of Bajaj Financal

Income Statement KPIs

Particulars	FY2023	FY2022	FY2021
Revenue	41,398	31,641	26,673
Interest (Paid)	12,701	9,855	9,519
Financing Profit	16,018	9,906	6,314
Net Profit	11,508	7,028	4,420

(In crores)

Balance Sheet and Cash Flow KPIs

Particulars	FY2023	FY2022	FY2021
Borrowings	216,690	165,232	131,634
Reserves	54,251	43,592	36,798
Cash From Operating Activity (CFO)	-42,140	-37,090	-807
Cash From Investing Activity (CFI)	-10,365	6,347	-429
Cash From Financing Activity (CFF)	50,675	32,275	1,741

(In crores)

Competitors of Bajaj Finance

We observed the market capitalization, overview, and many other statistical data of Bajaj Finance. Here we’ll look at some of the rivals:

Aditya Birla Capital Ltd
Edelweiss Financial Services Ltd
L&T Financial Holdings Ltd
Muthoot Capital Services Ltd
Reliance Capital Ltd

Services Provided

In this section, we will understand the services offered by the company. These are:

Durable Finance

People can purchase household goods such as washing machines, refrigerators, air-conditioners, microwaves, furniture, and many more in this finance service. Consumers can avail of up to Rs 4 lakh with zero or low-interest rates.

Personal Loan

This finance option provides collateral-free loans up to Rs 25 lakhs by meeting simple eligibility criteria and submitting basic documents. Consumers can avail the service by applying online personal loan application and also get it approved instantly without any hustle, and enjoy the flexible payment tenure ranging from 12 months to 60 months.

Gold Loan

A Gold Loan helps to meet a person’s financial needs. Bajaj Finance will provide a high loan limit of Rs. 20 lakh with attractive interest rates and flexible repayment options.

Home Loan

The company provides a lot of facilities to its consumers. Here a consumer can take a loan of up to 3.5 crore with low interest. The facilities provided are easy balance transfer facilities, minimal documentation, faster processing, and flexible tenure.

Loan against securities

Bajaj Finance gives the opportunity to take a hassle free loan without any liquidation of the asset. You can get a loan of up to Rs 10 crore with 0 Part Payment/Foreclosure charges while getting supported by a dedicated relationship manager.

Fixed Deposits

It is the safest way to invest and enjoy the flexibility and offers that the company will provide. Investors can easily choose a tenure between 12 months and 60 months per their financial requirements.

Business Model of Bajaj Finance

The Bajaj Finance business model primarily focuses on lending while maintaining a steady influx of low-cost capital in the form of deposits. They achieve this by offering cheap and low-cost loans to individuals and corporates while simultaneously providing higher-than-normal interest rates on deposits.

While this strategy may appear to reduce Net Interest Margin (NIM), it fosters higher deposits from retailers and facilitates a greater amount of loan dispersal over time. This approach builds trust and comfort among both depositors and borrowers, solidifying Bajaj Finance’s position in the financial services sector.

Income Model

The company earns from several sources, like delayed loan charges, processing fees, penalties, etc. Let’s break down some of the sources of Bajaj’s income. These are:

1. 0% EMI

This tends to attract the consumer as the customer won’t have to pay a single rupee in interest to the bank. Thus benefiting the manufacturer. In turn, the manufacturer pays a fixed percentage to the bank as the bank’s facility caused the increase in sales.

2. Loans

Consumers can take secured or unsecured loans from the company. The interest component on these loans becomes the company’s income source.

3. Interest Income

The company has made significant investments across asset classes, and interest received from such investments also acts as a significant source of income.

Success Factor

No one can replicate Bajaj Finance in the lending business because of their unique consumer-oriented services. Bajaj Finance mainly focuses on its Assets Liability Management. It is pretty hard to snatch the market share from Bajaj Finance because of the company’s consistent track record of low-interest loans while providing best-in-class services. These factors push the company and gain the trust of consumers, creating a trustworthy consumer base.

Conclusion

Bajaj Finance has become a household name because of its unparalleled services. At the same time, this has created a very loyal customer base and caused some distress to the company’s financials. We can see from the graph above that the company’s Cash Flow position is not healthy, and a downward trend is visible over time. This can lead to substantial problems in the long run if not corrected soon.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
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4	Infosys Case Study: Business Model and SWOT Analysis
5	Eicher Motors Case Study: Business Model & SWOT Analysis

Frequently Asked Questions (FAQs)

Who is the CEO of Bajaj Finance?
The current CEO of Bajaj Finance is Rajeev Jain.
What makes Bajaj Finance Limited so successful?
The main reason behind Bajaj Finance’s success is a customer-centric approach as the core value.
Bajaj Finance reported a negative cash flow from operations for FY23. Can this be considered a red flag?
Bajaj Finance has been reporting negative CFO figures for some time now, which could be considered an opportunity for development. Still, performing your research before deciding if this factor can affect your investment decision is essential.
What is Bajaj Finance’s NIM?
Bajaj Finance reported its NIM as 10.69%
Where is the headquarters of Bajaj Finance?
Bajaj Finance has its headquarters in Pune, Maharashtra.

March 8, 2024

ICICI Bank Case Study: Financials, KPIs, Growth Strategies, and SWOT Analysis

Financial Institutions are the backbone of the Indian economy as they accept funds from depositors and lend to those in need; this facilitates the flow of currency and thus helps the country move ahead.

Indian banks have played a crucial role in growing the GDP to 3.6 Trillion USD (As of Feb 24), making it essential to know about the situation of the banking industry. Therefore, in today’s blog, we’ll be talking about ICICI Bank, which constitutes almost 25% of the Bank Nifty Index (As of Feb 24).

ICICI Bank Overview

The Industrial Credit and Investment Corporation of India (ICICI) was a government entity established on the 5th of January 1994. Sir Arcot Ramasamy Mudaliar was elected as the first Chairman of ICICI Ltd. It is a multinational company and financial services company headquartered in Mumbai.

It offers several services in the sector of banking and finance for corporate entities and retail customers via a variety of delivery channels and specialized subsidiaries, including but not limited to investment banking, life insurance, non-life insurance, loans and venture capital.

Full Name	Industrial Credit and Investment Corporation of India
Company Type	Listed
Industry	Finance and Banking services
Founded	1994
Headquarter	Mumbai, Maharashtra
Products offered	Consumer banking, Commercial banking, Insurance, Credit cards, Investment Banking, Mortgage loans, Private banking, Private equity, Investment Management, Asset management, Mutual funds, Wealth management, etc.
Subsidiaries	ICICI Prudential Life Insurance, ICICI Lombard, ICICI Securities, ICICI Direct, ICICI Home Finance Company
Presence	5,900 Branches and 16,650 ATMs
Key people	Girish Chandra Chaturvedi (Chairman)Sandeep Bakhshi (MD & CEO)

Key Highlights for FY2022-23:

● Total Deposits stood at ₹ 11,808 billion, and Total Advances were ₹ 10,196 billion.

● Net Interest Margin (NIM) is 4.48%, and Net Interest Income (NII) is ₹ 621 billion.

● Profit before tax, excluding treasury gains, reached ₹ 424.73 bn in FY2023.

● Core operating profit stood at ₹ 491.39 bn in FY2023.

● Provisions and contingencies were ₹ 424.73 bn in FY2023.

● Average current account deposits grew up 1.9% y-o-y to reach ₹ 1,614.86 billion.

● Average saving deposits grew up 5.5% y-o-y to reach ₹ 3,797.76 billion.

Key Data Points for ICICI

Let’s have a look at the statistical data of the company:

Market Cap	₹ 7,69,828 cr.
Current Price	₹ 1,097
Stock P/E	18.2
52 Week High / Low	₹ 1,114 / 810
ROCE	6.32 %
ROE	17.2 %

(As of 6 March 2024)

Net Interest Margin (NIM)	4.14%
CASA Ratio	45.84%
Total Capital Adequacy Ratio	18.34%

(As of 31 March 2023)

Strategy and Growth of ICICI Bank

Strategy

In 2023, Indian equities emerged as outperformers in the global space, particularly in the mid and large-cap space, while facing rising international policy rates, volatile community rates, and geopolitical tensions. During all this turbulence, ICICI stayed consistent and remained the 2nd largest private bank in India after HDFC Bank. Here are some of the strategies implemented by them.

● Credit Growth:

Loans are the primary revenue drivers for the bank and help to enhance the growth in the market. ICICI Bank has increased its domestic loan book by 20.5% y-o-y to reach ₹ 9855.28 bn. In FY23, the bank’s total advances grew by 18.7% y-o-y to reach ₹ 10,196.38 bn, and Overseas Book reached ₹ 341.1 bn.

● Deposit Growth:

In FY23, deposits increased by 11% y-o-y to reach ₹ 11,808.41 bn. Overall, the average CASA deposit growth was 13.3%.

● Capital Adequacy:

Capital Adequacy stood at 18.34% for FY23, 19.16% for FY22 and 19.12% for FY21. Thus indicating a healthy margin over the RBI-mandated percentage.

● Profit After Tax (PAT):

Profit after tax increased to ₹ 318.96 bn, growing at 36.7%.

Did you know?

ICICI Bank has supported over 400 hospitals, benefitting over 1.5 million people by fostering healthcare facilities and infrastructure.

SWOT Analysis of ICICI Bank

Strengths

● ICICI Bank has a presence in 19 countries. Thus making it easier for it to expand further.

● In FY23, ICICI had a nationwide network of 5,900 branches and 16,650 ATMs.

● ICICI boasts about a robust infrastructure with a meagre crash rate. ICICI hosts 1.5 million active users on its banking app InstaBIZ, the value of which grew 22% in FY23.

● This bank enjoys a strong brand identity due to its vast branches and ATM network.

Weaknesses

● ICICI Bank faces tough competition from SBI and HDFC bank, making it difficult for ICICI to improve its ranking beyond the current position of 3rd largest bank in India (in terms of deposits).

● The banking industry, in general, saw massive corrections in FY23 as the bull run of 2021-2022 seems to be coming to an end. This can be noticed by comparing Nifty Bank returns with other indices; Nifty Bank grew around 15% while Nifty Pharma grew at 63% (in FY23).

Opportunities

● While it may seem difficult for ICICI to outgrow SBI and HDFC, it is still possible via implementing fast growth strategies such as expansion in tier 3, M&A, etc.

● ICICI’s penetration into the Tier 3 segment of India remains limited; they can gain considerable market share if they focus on substantially improving customer service in Tier 3.

Threats

● Policies impact the banking industry significantly, any unanticipated changes in the monetary policy can cause substantial damage to the bank’s KPIs.

● The bank has grown considerably in the last decade, this was made possible due to the brilliant policies and strategies of the management. But, the banking industry is extremely volatile and failure to adapt quickly could erode all the success.

● NBFCs and Fintechs have seen a massive uptrend in the past few years. This trend will likely continue and potentially revolutionize the banking industry as we know it. This could substantially affect the business’s bottom line figures.

Conclusion

In summation, we evaluated the business, growth strategy, and financials of ICICI Bank. As of February 2024, It is the 2nd largest bank in the nation in terms of Market capitalization and represents a strong position to capture market share amidst the growing demand for credit in the upcoming years.

Frequently Asked Questions (FAQs)

Is ICICI the largest bank in India?
ICICI Bank is the 2^nd largest bank in India in terms of Market Capitalization.
Who is the CEO of ICICI Bank?
Sandeep Bakhshi heads ICICI Bank as the MD and CEO.
What is ICICI Bank known for?
ICICI Bank offers corporate and retail customers a wide range of banking products and financial services through various delivery channels and its group companies.
Is ICICI Bank a Private Bank or a Government Bank?
ICICI Bank is a Private sector bank.
What is the full form of ICICI?
The ICICI stands for Industrial Credit and Investment Corporation of India.

March 7, 2024

Financial Scams in India: Types, Resolution, and Awareness

Did you know that during the financial year 2023, the Reserve Bank of India (RBI) registered bank frauds exceeding INR 30,000 Cr in value? Nowadays, financial scams have become more prevalent, making it difficult to distinguish fraudulent activities from genuine ones.

As per the reports of Statista in 2023, the Reserve Bank of India reported 9,103 financial scams across India. In this blog, we will understand how to avoid scams with the aim of increasing awareness.

Prevalence of Financial Scams in India

In 2023, India’s financial sector witnessed a surge in sophisticated scams and frauds that exploit evolving technologies and capitalize on unsuspecting individuals. Here are some facts pertaining to the year of 2023:

The national cyber crime helpline receives around 50,000 Calls every day, totalling over 13.1 lakh complaints in the entire year.
During investment and due process, a total of 2.95 lakh fake SIM cards, 46,000 devices, 2,810 websites, and 595 mobile applications were blocked.
Approx. 35% of the total scams focussed around customer service and KYC.
Approx. 24% of the total scams focussed on sextortion.
Approx. 22% of the total scams were focused on online bookings and QR codes.

While scams are spread out in the entire country, some states witnessed more than others. Data for some of the individual states (& UTs) are as follows:

Uttarakhand – 243 cyber crimes per capita
Gujarat – 226 cyber crimes per capita
Haryana – 381 cyber crimes per capita
Telangana – 261 cyber crimes per capita
Delhi – 755 cyber crimes per capita

It is an undisputed fact that the country is facing an epidemic of scams and frauds. Hence, we must know about the varied types of scams happening around the country.

UPI Scam

The advent of UPI transactions marked an important milestone in the digital era of payments in India. However, fraudsters and scammers are using different social media platforms like WhatsApp to gain access to a number of individuals and defraud them via various means, such as claiming to be bank representatives, NGOs, etc. They feed on fear of the victims and compel them to adhere to the fraudsters’ demands.

In the year 22-23, reported UPI fraud cases exceeded 95,000, a notable increase from the 84,000 cases reported in 2021–2022, as per the Ministry of Finance.
Shockingly, 55% of all digital payment frauds in India are associated with UPI transactions.
According to the reports, it has been witnessed that 50% of these scams have an average ticket size of less than Rs 10,000.
In 2023, UPI fraud, bank fraud, and email scams resulted in a staggering financial loss exceeding INR 200 cr.

QR code scam alert

Nowadays, QR code scams are on the rise in India, with fraudsters employing deceptive tactics to lure victims into scanning fraudulent QR codes, resulting in the direct theft of funds from their bank accounts.

As per police statistics, 41% of the 50,000 reported cybercrime incidents in Bangalore revolved around QR codes.

Part-time job scams

Fraudsters are using social media to target their audiences with promises of easy part-time work and handsome salaries.

As per a report in 2023, Delhi police addressed 467 complaints about internet fraudsters advertising part-time work—an alarming increase from the 32 complaints reported in 2020.

Courier Scam

These kinds of scammers are targeting young audiences and claiming that courier parcels, allegedly containing drugs or other illegal items, are being sent in their names to foreign countries.

Bengaluru police addressed around 163 such courier reports in 2023, and the cumulative financial loss from these scams was more than Rs 5 cr.

Malware warning frauds

Fraudsters are increasing in delusive tactics, like fake customer support, cashback links, or emails, to convince unsuspecting consumers to install malware, screen mirroring, or remote access apps.

Tech support scams are becoming a worrying factor where 7 out of 10 consumers fall victim to such schemes.

Financial Scams Awareness

Protecting yourself from financial scams and fraud in India requires awareness and caution. Frauds and scams exist in different forms: phishing, emails, and phone calls. Some steps to protect yourself are stated below.

Educate yourself

Knowledge is a great way to defend yourself from scams and frauds. Stay informed and updated about scams and fraud. Government bodies provide information about current scams and how to avoid them.

Verify PIN

Do not share your PIN or any other personal information with anyone. Reputed organizations will not ask for your PIN.

Two-step -verification

It is essential to enable the two-step verification factor. This will help you to give an extra layer of security.

Use strong passwords

Create strong and unique passwords for your files, including social media sites, banking files, etc. Always use a combination of letters, numbers, and special characters, and avoid using the same passwords for multiple portals.

Beware of fraud phone calls

Avoid picking up calls from suspecting numbers and do not provide any confidential details on such calls, even if they claim to be representatives of corporations.

Ask help

If you become the victim of a scam, then consult with the police and legal professionals to seek resolution as quickly as possible.

Financial Scams Resolution

In a recent interview, the Director General of Police (DGP) of Uttarakhand, Ashok Kumar, spoke on cyber crimes in India. He explained a few preventive steps to minimize cyber crimes, fraud, and scams. The pointers are stated below:

Notify your bank’s customer service immediately, report your incident to them, and ask for help to cease your bank details.
File a complaint with NCRP (National Cyber Crime Reporting Portal).
Contact your local police station and also file an FIR.
Keep a close eye on your account’s transactions.

Conclusion

In conclusion, it is crucial to stay informed and cautious to avoid falling victim to scams and fraud in India. By educating themselves, verifying identities, enabling two-step verification, using strong passwords, being wary of fraudulent phone calls, staying updated, and seeking help when needed, individuals can protect themselves from financial scams and fraud.

Frequently Asked Questions (FAQs)

What is Fraud?
It is defined as the false representation of facts or providing false statements to another party for the specific purpose of gaining something that may not have been supplied without the deception.
What are two basic types of Fraud?
The courts classify fraud under two major types: criminal and civil.
What is an example of a fraud scheme?
Common frauds include Ponzi schemes, phoney job offers, false billings, bogus investment opportunities, etc.
Why is it important to understand fraud?
Fraudsters have evolved their methodology in recent times. Therefore, we need to stay aware of their movements so that we can protect ourselves from getting defrauded.

March 7, 2024

Polycab Case Study: Business Model, Financials, Competitors, and Growth Outlook

Polycab India is one of the leading manufacturers of wires and cables in the nation. It is engaged in the business of manufacturing wires and cables. Along with these products, Polycab offers FMCG products such as electric fans, LED lighting and luminaires, switches & switchgear, solar products, and conduits & accessories. Let’s look at its company profile, financials, market position, and segments.

All About Polycab

This reputed company was incorporated in 1964, in Mumbai as a private limited company under the Companies Act, of 1956. The company’s consolidated turnover of INR 14,108 Crores in FY23. The company focuses on brand positioning, new product development, scaling operations, customer-centricity, talent acquisition, go-to-market excellence, and good governance.

In FY23, the revenue of Polycab contributed to a consolidated 9.8% of the revenue in international business. The company also has expanded its footprint in 93 countries. The company is enhancing its reach and distribution in B2C business and increasing its presence in white spaces for B2B business.

Key Metrics

Market Cap	₹ 73,244 Cr.
Current Price	₹ 4,881
High / Low	₹ 5,733 / 2,754
Stock P/E	44
Book Value	₹ 479
Dividend Yield	0.41 %
ROCE	27.0 %
ROE	20.0 %
Face Value	₹ 10.0

Product Mix

Products	Sales in FY23
Wires and Cables	89%
FMEG	9%
Copper and others	2%

The figure presents an overview of the segments for Polycab India in the FY 2023. The company’s total revenue was INR 14,108 Crores, of which 89% came from wires and cables, 9% from FMEG (fast-moving electric goods), and 2% from copper plus other sources.

Revenue of Polycab

Year	Revenue in (INR Crores)
FY19	7,986
FY20	8,830
FY21	8,792
FY22	12,204
FY23	1,41,078

Notes: Numbers are on a consolidated basis.

The figure represents a CAGR of 15% in revenue between FY19 and FY23.

Products Offered by Polycab

This company has a diversified range of products and their main products are wires and cables segments. These are:

Control and power cables
Instrumentation cables
Building wires and green wires
Welding cables

Project Leap

Project Leap is a multi-year transformational programme aimed at having the right methodology in place which will enable them to achieve INR 200 billion of the top line by FY26. Progressing towards the goal, the company witnessed strong Q3FY24 performance and generated revenue of ₹4,340 crore, growing by 17% YoY.

Competitors of Polycab

The industry faces tough competition due to its low barriers to entry. Some of them are :

KEI industries
Sterlite Techno
Finolex cables
Precision wires
Universal cables.

A New Era

In an era, where branding plays a critical role in establishing a company’s identity and connection with customers, Polycab identifies the significance of refreshing its brand and staying in touch with technological advancements. The company engages in deep research and development which helped them to scale up its businesses in the FMEG segment. The company also introduced a new tagline “Ideas. Connected.” which builds on the idea of a future where innovative products simplify lives. Their main intention is to connect with their customers deeply and build brand loyalty.

The main pillars of the new brand will constitute a diverse range of products and services such as home automation products, FMEG goods, improved customer experience, and sustainable cables and wires. Polycab’s growth momentum is driven by the growth in its B2C business and sustenance in B2B business while expanding its footprints internationally.

Growth Outlook

In 2024, Polycab is planning to witness substantial growth in its business with more focus on 2 of its product segments – Wires and Cables and FMEG (Fast Moving Electrical Goods).

By FY26, the company aims to achieve the following objectives:

Attain revenue of ₹20,000 crores.
Achieve EBITDA margin of 10-12% in the FMEG segment.
Achieve 2 times market growth in emerging segments.
Secure over 10% of its contribution from online channels.
Build stronger and more robust relations with the customers.

Conclusion

Polycab India has established itself as a leader in the wire industry, with a strong focus on innovation, customer-centricity, and sustainable growth. The company’s strategic initiatives, such as Project Leap and brand revitalization, are driving its expansion and success in both domestic and international markets.

Looking forward, the company has plans to grow even more. Polycab wants to acquire greater market share and meet the increasing demand for their products in global markets.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	Hindustan Unilever Case Study
2	Case Study on Apple Marketing Strategy
3	Reliance Power Case Study
4	Burger King Case Study
5	D Mart Case Study

Frequently Asked Questions (FAQs)

What is the market share of Polycab?
Polycab is expected to have an organised market share of 22% – 24%.
Who is the Chairman of Polycab?
Inder Jaisinghani runs Polycab as its Chairman and MD.
Is Polycab a debt-free company?
The company is almost debt-free. Polycab has a healthy Interest coverage ratio of 31.12 and a debt to equity ratio of 0.01.
What is Project Leap of Polycab?
Project Leap is a multi-year programme aimed at having the right infrastructure in place which will enable them to achieve INR 20,000 Crores of Revenue by FY26.
What is the EBITDA Margin of Polycab?
Polycab reported an EBITDA Margin of 13.1% in FY23, an increase of 270 bps from 10.3% in FY22.

March 7, 2024

Explainer on Portfolio Management Services (PMS): Features, Types, Charges, Taxation, and Risks

If you have accumulated significant wealth during your career and wish to seek professional help in managing the funds, then Portfolio Management Services (PMS) can prove helpful to you.

Today’s blog will focus on individuals who wish to gain more profound knowledge of Portfolio Management Services (PMS).

Portfolio Management Services Overview

Portfolio management services, or PMS, is a financial service offered by financial institutions. This service primarily focuses on investing investors’ funds with a larger portfolio than the average individual. Such investors can invest their money in this service, and a team of qualified fund managers will allocate it to various asset classes based on their investment goals.

Typically, investors allocate a portion of their portfolio to equity but cannot manage it effectively due to a lack of professional knowledge. This is where PMS comes in; with a minimum investment of 50 Lakhs, your entire investment amount will be given to a portfolio management company, and their team of seasoned professionals will allocate it among various asset classes based on market and economic conditions. In exchange, they will charge a fee for their services.

The first announcement of the SEBI regulation for PMS dates back to 1993. All Portfolio Management Companies are required to adhere to the compliance standards established by SEBI.

Minimum Investment Amount

Over time, PMS’s minimum investment amount has undergone modifications. The PMS legislation was first established in 1993, with a minimum investment value of 5 lakh. In 2012, the minimum investment amount was raised to 25 lakh; in November 2019, it was further increased to 50 lakh.

Features of PMS

1. Investment in PMS provides customized solutions as per investors’ objectives.

2. The fund managers have vast experience in managing funds

3. PMS fund managers generally diversify the investment across different asset classes, ultimately lowering the risk.

4. Reports like transactions, profit and loss, etc., will be sent periodically to investors, and they can also check the same on the online platform provided by PMS companies.

5. PMS is a product with a minimum ticket value of 50 lakhs, which is generally suitable for HNI investors.

Types of PMS

A financial institution offers a variety of portfolio management services, including

1. Discretionary Portfolio Management– The portfolio managers make all investment-related decisions under this category of portfolio management services on the client’s behalf. Before making any investments, the fund management is at liberty and is not required to confer with the investor. The majority of the clients choose this type of service.

2. Non-discretionary Portfolio Management– The fund manager must obtain the client’s confirmation before investing in this kind of service. The client receives financial advice from PMS’s investment team but ultimately decides whether or not to act on the advice.

3. Advisory Services – In this arrangement, a fund manager will merely offer advice to investors on various asset classes; the investor will decide whether to follow the fund manager’s recommendation.

4. Active Portfolio Management – The ultimate goal of active portfolio management is to maximize investor return, which is accomplished by actively allocating funds to various asset classes. The fund management actively chooses the allocation of funds and where to invest them.

5. Passive Portfolio Management – The fund manager uses this investment management technique to allocate the funds to stocks that track indexes and increase steadily over time.

Charges of PMS

The charges of PMS can be classified into 3 different categories-

Fixed Charges

This is what every PMS charges as its main fee. This is an ongoing charge that depends on the average value of your investment and varies from 1% to 3%. The fee is due regardless of the fund manager’s performance ratings. This is the minimum amount that must be paid to the PMS firm regardless of the fund’s performance.

Below is the illustrative table of the same.

Fees	2%
Investment Amount	50,00,000
Return on Portfolio	20%
Profit	10,00,000
Portfolio Value at the year-end	60,00,000
Fixed Charges 2%	1,20,000
Net Value of Portfolio after Fees Adjustment	58,80,000

Performance Based

The fund’s returns are used to determine these fees. The fund management will charge a fee based on the percentage of profit made above the minimum rate, also referred to as the hurdle rate.

We can better understand this by using an example. For example, if the hurdle rate is 8% the profit sharing ratio is 20% above the hurdle rate, and your investment of Rs. 50 lakh yields a 20% return on your portfolio, your total profit will be Rs. 10 lakh, of which Rs. 4 lakh is the minimum profit that needs to be delivered. The company will then charge a fee of 20% of the remaining profit of 6 lakhs.

Below is the illustrative table for the same.

Fees	Profit Sharing – 20% above 8% Hurdle Rate
Investment Amount	50,00,000
Return on Portfolio	20%
Profit	10,00,000
Value of Portfolio at the end of the year	60,00,000
Hurdle Rate 8%	4,00,000
Profit over hurdle rate	6,00,000
Profit Sharing 20% of 6,00,000	1,20,000
Net Value of Portfolio after Adjustment	58,80,000

Hybrid Fee Structure

This fee schedule combines a profit-sharing concept with a fixed fee. In this instance, the hurdle rate is typically higher than in a performance fee-based approach, and the fixed charge rate will be lower than in a fixed charge model. This is intended for PMS managers who wish to profit from both fee structures.

Taxation

Equity Taxation – If a portfolio is heavily weighted toward the equities asset class, the tax rate on the profit amount will be 15% if the holdings are sold within a year, and the appropriate rate will be 10% above 1 lakh if the holdings are sold after the year.

Non-Equity Taxation – The portfolio will be considered a short-term gain and included in the investor’s income at their slab rate if it is sold within three years and does not concentrate in the equity asset class. If the units are sold after three years, they will be considered a long-term gain and subject to a 20% tax with indexation benefit.

Dividend Income –All dividend income earned on the investment will be included in the investor’s income and taxable as per their tax slab.

Exit Load – If you withdraw your money before a predetermined amount of time, PMS firms typically charge an exit load, ranging between 1 to 3%.

Risks

The risks investors should consider before investing in PMS are listed below.

1. Performance of Fund Manager – Evaluating the fund manager’s performance before investing is essential. Looking for a fund manager with a stable track record is usually advisable.

2. Market Risk – Due to the investment’s significant exposure to the equities asset class, there is a greater chance of losses and a rise in portfolio volatility.

3. Liquidity Risk – Because certain illiquid securities are difficult to sell, investing in them may affect your portfolio liquidity.

4. Regulatory Risk – As previously stated, the minimum ticket size for investing in PMS has increased from 25 lakhs to 50 lakhs in 2019. Future legislative changes of this nature could affect PMS’s investment strategies and tax consequences.

Conclusion

We’ve gone over the benefits and risks of investing in PMS with you; this service is for high-net-worth individuals (HNIs) who understand the risks involved in this kind of investing. Suppose an investor is willing to assume the risk of this product and is seeking a better return. In that case, they should consider all the important characteristics before making a decision.

Before making any investing decisions, we advise you to speak with your financial advisor to better understand your ability to accept risk.

Frequently Asked Questions (FAQs)

Is PMS investment permissible for NRIs?
Yes, You can invest in PMS as an NRI.
How do I access my PMS portfolio valuation?
In addition to sending clients statements regularly, PMS businesses offer their clients an online portal through which they can monitor their assets, transaction statements, and profit and loss statements.
How can you evaluate PMS performance before purchasing?
Before purchasing PMS, you can evaluate its performance by comparing its returns to the appropriate benchmark and examining the consistency of its returns over an extended duration.
Does PMS have a lock-in period?
PMS offers the flexibility of no lock-in period. However, redeeming your investment before the allotted time will incur an exit load.
Is there a guaranteed return in PMS?
No, PMS company cannot provide investors with a guaranteed rate of return.

March 7, 2024

Introduction to Bearish Candlesticks Patterns: Implications and Price Movement Prediction

In our last blog, we explained a candlestick pattern and which bullish patterns to consider before entering a bullish trend. However, how can you tell when a stock will correct after making higher highs? In this blog, we’ll introduce you to several bearish candlestick patterns, which will help you determine when to exit a buying position.

To learn more about bullish candlestick patterns, click here.

Hanging Man

Typically, this one-off candlestick pattern emerges after an upward trend. It is referred to as a bearish reversal pattern, which suggests that an uptrend is ending and that a stock price correction is on the card. The candle is small in the top part and has a lengthy bottom shadow that extends beyond the body of the light, giving the appearance of a hanging man. However, the shadows in the upper part are either nonexistent or minimal. This pattern appears after a strong uptrend with an increase in selling volume.

Shooting Star

The shooting star sometimes called the inverted hammer candlestick pattern, signals that a stock’s upward trend will halt and a negative one is about to start. The single candlestick in this pattern has a little body with a longer upper shadow (lacks a lower shadow). This candle typically indicates that although purchasers attempted to drive up the price, they could not because of selling pressure.

Dark Cloud Cover

A pair of candlestick patterns called “dark cloud cover” signals the end of an uptrend. A bullish candle with a lengthy white or green body that suggests a significant upward trend will be the first candle to appear. The second candle will be red and open higher than the close of the day before, but it closes below the candle’s halfway. This pattern typically signals a bearish trend’s beginning and a bullish sentiment’s end.

Bearish Engulfing

It is considered a strong reversal signal, which indicates that bullish movement is about to end, and a potential downtrend may start. This is also a two-candlestick pattern out of which the first candle is green and has a small body. The second candle opens above the previous day’s close and closes below the last day’s open by covering the entire range of the last day’s candle. The size of the second candle needs to be larger than the size of the first candle.

Three Black Crows

The three candlestick pattern known as the “three black crows” is a vital clue that a negative trend in the script is about to start. The three candles are all bearish, and since their closing prices are all less than their opening prices, they are likely to lack a wick or have a short one. The selling pressure increases with the length of the candle’s body. And the closing price of every candle should be near to its low. Also, a larger volume using these candles will put more pressure on the seller to sell.

Tweezer Top

This pattern suggests that the peak has formed and that the stock is ready to go into a bear trend. This is also a two-candlestick pattern, where the buyers are showing interest in the stock indicated by the first green candle, and the second candle, which forms later, is bearish, indicating that the closing price is lower than the opening price and that the highs of both candles are the same or barely differ. This pattern suggests that selling pressure is building and that purchasers are unable to gain control over the stock. These two candles are known as “Tweezer Tops” because of the way their patterns form; they look like tweezers.

Gravestone Doji

At the height of a bullish run, this candlestick pattern emerges. The graveyard doji is a little real-body candle with a long upper wick or shadow and a small or nonexistent below shadow. It shows that the opening and closing values of the candle are near the low of the trading session. The shape suggests that the buyer initially attempted, but was unable, to drive the price higher, and that ultimately, the closing price approached the lowest price of the day, taking the form of a gravestone.

Bearish Kicker

The pressure of volume has suddenly shifted from purchasing to selling. This two-candlestick pattern usually appears near the peak of an ascending trend. Two candlesticks will appear in this pattern: a long, bullish candle that suggests the upswing will continue and a gap-down candle that opens below the closing price of the preceding candle and closes below its low.

Bearish Harami

Bearish harami is a pattern that generally indicates that the upside has now been limited in stock, and a downside movement looms. It is a two-candlestick pattern. The first candle is a large bullish candle, followed by the second bearish candle, which is very small in trend and engulfed by the previous candle. The closing price of the second candle is significantly lower than the opening price of the first candle.

Conclusion

The bearish candlestick patterns will assist traders in taking short positions in the market. Using the indications above, one may determine when a bullish trend in a specific stock is about to stop and a negative trend is about to start. In general, there is no assurance from these indicators that the bearish trend will begin or persist. It is essential to realize that these patterns may not hold up if any unexpected news regarding the stock is made public.

Thus, before making any trades, traders should always review the larger market context, consider a few more indications in addition to the ones listed above, and remember that risk management is crucial.

Frequently Asked Questions (FAQs)

How important are the length and shape of a bearish candlestick pattern??
The length and shape of the candlestick pattern typically indicate the level of selling pressure in a particular stock.
Where can the bearish candlestick pattern be found?
A bearish candlestick pattern can be discovered close to the resistance level in an uptrend.
When a stock is trending downward, can I still trade?
Yes, you can take advantage of the sell-side opportunity by initiating a short position in the stock.
Which bearish candlestick pattern is the most effective?
There are various bearish candlestick patterns, such as bearish harami, hanging man, shooting star, black cloud cover, etc. However, each bearish candlestick pattern has pros and cons, so managing your risk appropriately is vital.
Is it possible for me to trade without understanding candlestick patterns?
You can trade without knowing about candlestick patterns. Still, it could be quite challenging for you to determine any stock’s trend because candlestick patterns are used in technical research to help you determine potential stock price trends.

March 6, 2024

Introduction to Bullish Candlestick Patterns: Implications and Price Movement Prediction

Technical analysis is an integral part of trading, and today we’ll explain a few Bullish Candlestick Patterns that experienced traders employ to indicate a potential movement of stock price and thus earn abnormal returns.

If you wish to expand your knowledge on Bearish Candlesticks Patterns, then click here to read our blog.

Bullish Candlestick Overview

Candlesticks are the pictorial representation of stock price movement over a specific period of time. The period can be daily, weekly, half-yearly, etc. The candles are formed by a stock’s open, high, low, and closing price. They are often shown by different colors, such as – a green or white candle stands for upside movement in the stock while a red or black candle represents the downward movement.

A candle has three parts:

1. The body represents the stock’s open and closing prices.

2. The wick displays the stock’s intraday high or low.

3. The color of the candlesticks indicates the direction of the stock’s price movement.

Bullish Candlestick Patterns

This pattern indicates that the stock price will rebound and trend upward following a stock price correction. Traders typically utilize the candlestick pattern to enter a stock after it has shown an upward trend.

A few typical bullish candlestick patterns are listed below.

Bullish Engulfing Pattern

This candlestick pattern indicates a turnaround and the conclusion of a downward trend. It manifests as two candles, the larger of which is a bullish candle that swallows the earlier bearish candle. It shows the change in momentum from negative to positive. Traders will interpret this as an indication to go long in stock. It is named “engulfing” because the body of the bullish candlestick “engulfs” the entire body of the previous bearish candlestick.

This pattern is more likely to occur when a stock price has had a substantial decline and the stock is finding support close to its critical levels. Additionally, a higher volume suggests buyers are becoming interested in the stock.

Hammer Candlestick Pattern

It is formed like a hammer, as the name implies. This single candlestick pattern appears when a stock hits its support level at the bottom of a downtrend. Hammer candles have long wicks and small upper bodies because the wick in the lower portion is significantly longer than the candle body in the upper half.

Traders typically interpret this as the end of selling pressure, at which point purchasers attempt to regain control of the buying interest.

The widespread consensus is that the stronger the bullish indication, the longer the lower wick of the candle.

Morning Star Candlestick Pattern

This bullish pattern with three candles usually appears at the bottom of a downtrend. The first candle in this pattern will be a long bearish candle, signifying that sellers are in complete control of the stock; the second candle will be a little body candle, suggesting that selling pressure may be waning. The long bullish candle that closes above the first candle’s midpoint will be the final or third candle. This suggests that buyers are attempting to control the stock price movement fully.

The strength of the pattern increases with the size of the second little body candle. When it follows a protracted downward trend, this pattern is more dependable.

Piercing Pattern

The pattern has two candlesticks and is bullish. The first candle in this pattern is bearish, while the second candle reverses course and closes close enough within the body of the previous day’s bearish candle. The second candle opens lower than the previous day’s close, or it opens with a gap down and trades lower during the session. The candle, on the second day, ought to close halfway up to the bearish candle’s body.

The bullish pattern’s strength increases with the bullish candle’s size relative to the preceding bearish candle.

Three White Soldier

Three consecutive white or green candles make up this bullish reversal candlestick pattern. It typically occurs near the conclusion of a downward trend and indicates a possible uptrend. Every one of the three white candles opens higher than the body of the candle from the day before and closes at a higher price. No upper shadow on any of the three candles should indicate constant purchasing pressure. Each candle in the pattern should have a body larger than the one before, signifying a purchasing indication. Buyers are believed to be aggressively gathering momentum in the stock through this pattern.

Bullish Harami Pattern

It is a signal that could indicate an upward trend reversal in the stock. It is a two-candlestick pattern that appears while the market is declining. The first candle in this pattern is a big bearish candle that suggests there is selling pressure on the stock, and the second candle is a tiny bullish candle that is entirely surrounded by the first candle’s body. The second candle begins lower than the previous day’s close and ends higher than that day’s opening. Although the second candle is bullish, it is smaller than the bearish candle that came before it, indicating insufficient positive momentum to reverse the downward trend completely.

Tweezer Bottom

The tweezer bottom pattern indicates that bulls are attempting to take complete control of the stock as selling pressure is likely to release. This pattern is often regarded as stronger when the stock is close to its support and is thought to be more dependable when it emerges following a prolonged downturn. The first candle in this pattern is bearish, which usually has a lengthy lower shadow. The second candle’s body should be larger than the first, and its bottom should be close to the first candle’s low. The pattern of these two candlesticks is similar to a pair of tweezers.

Conclusion

We’ve gone over the most common bullish candlestick patterns, but a trader must perform their due diligence before investing in stocks. It is also essential to remember that even with bullish candlestick patterns, it is advisable to use all other types of candlestick patterns to assess the larger market, as these can occasionally be false signals.

Frequently Asked Questions (FAQs)

To what extent are bullish candlestick patterns dependable?
Although bullish candlestick patterns can offer insightful information about the possible direction of stock movement, they should be utilized with additional indicators and tools for technical analysis to ensure accuracy. Since no single signal or pattern is perfect, it is essential to consider a range of factors before making trading decisions.
Which is the best bullish candlestick pattern?
Since each bullish candlestick pattern has advantages and disadvantages, controlling your risk when trading is always advisable.
What does the red candle signify?
A red candle indicates that the stock is likely to be in a downward trend and close lower than the previous day.
What do you mean by the wick of a candle?
The wick of a candle refers to the thin lines that extend from the body of the candle, reflecting the highest and the lowest price that stock hits on a particular day. These are also called the “Shadow” of a candle.
Do all bullish candlestick patterns have a long wick or shadow?
No, all bullish candlestick patterns do not have long wicks or shadows; only some candlestick patterns, like a hammer, etc, have shadows.

March 6, 2024

Company Type	Public
Industry Type	Retail, Apparel
Founded on	1998
Headquarters	Mumbai, Maharashtra, India
Parent	Tata Sons
Subsidiaries	Westside, Zudio, Landmark Bookstores, Zara (India), etc.

Market Cap	₹ 1,70,629 Cr.
Current Price	₹ 4,800
52 Week High / Low	₹ 8,346 / 3,801
P/E	115
Book Value	₹ 132
Dividend Yield	0.06 %
ROCE	23.80 %
ROE	27.20 %
Face Value	₹ 1.00

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Key Performance Indicators (KPI)

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Future Outlook

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